The document discusses Shanghai Tobacco's plans to expand into the US market through partnerships with distributors. Shanghai Tobacco currently holds 40% of the global tobacco market and is looking to partner with a US-based distributor to handle operations in specific states. The distributor would purchase an initial shipment of Shanghai Tobacco products and be responsible for local compliance, taxation, and distribution. In return, the distributor would receive exclusive rights to their state and support from Shanghai Tobacco and iSales Strategy in marketing efforts. The document outlines a 5-step process for distributors and estimates it would require $16 million to initially cover the entire US market at a level of 0.5% market share.

1. Mark Harai
CTO/CIO
iSales Strategy Inc.
www.isalesstrategy.com

2.  The US ranks 3rd in global tobacco
consumption next to Russia & China
 The US accounts for 5.38% of the
worlds tobacco market with China
holding the largest share at 38.5%
 The US Tobacco Industry generates
$110 Billion in revenues annually,
producing a net industry profit of $35
Billion
 Smoking Incidences have declined
over the years, but has stabilized at
the 23% range
 There are 60 Million Smokers in the
US market
 The Biggest Tobacco Player in the US
is Philip Morris International, based in
Lausanne, Switzerland

3.  Tobacco companies are the most
profitable corporations in the world,
despite tighter regulatory mechanisms
 Stock Price of tobacco companies have
grown by 15 times in the last 10 years
 Higher profit margins are driven by
consumption and product profit mix
 Core driver of tobacco products are
PRICE & QUALITY
 There is an increasing incidence of Legal
Age Smokers from 18 to 35 years old
 Better technology in tobacco products
boost consumption in spite of higher
taxation rates
 Highest Individual Per Capita Consumers
are those countries that formerly
belonging to the Soviet Union &
European Nations

4.  China Tobacco owns 40% of the worlds tobacco
industry
 China Tobacco is the most profitable tobacco
company in the world
 China Tobacco is looking to expand in the North
American Market
 Shanghai Tobacco is the Global Marketing and
Manufacturing arm of China Tobacco which is
based in Hong Kong
 China Tobacco is the primary source of
international tobacco products for Shanghai
Tobacco

5.  Shanghai Tobacco is looking for a distributor in the US
 Focus is primarily in setting up distribution and presence
for the identified brands
 Company in charge of endeavor is iSales Strategy Inc., a
global management consulting firm dedicated in setting
up product presence in international markets

7.  Premium Cigarette at the most affordable price
 Charcoal Filter Technology that eliminates odor of Primary & Secondary Smoke
 Product Quality and taste is far better than the Marlboro or any of the leading brand

10. • Charcoal Filter Technology
(Eliminates smoking odor
of second hand smoke)
• Western Blend
• Available in Menthol &
Non-Menthol

12.  71,958 Supermarket Retail Stores
 320 Million Total Population
 60 Million Smokers
 285 Billion Stick Market Annually
 Average Cigarette Price per Pack: $7.20

17. Shanghai Tobacco Plan
0.5 % of Total U.S Cigarette Market
$552 Million Annual Business

22.  Shanghai Tobacco Cigarettes are 46% Cheaper - and far better
Quality than any premium brand
 Price Advantage Translates into $552 Million Annual Business
 Shanghai Tobacco Products Provides Higher Profits for the
Distributor and Retailer

27.  Average of $3.89 lower price between Shanghai Tobacco products
and other brands
 Translates to average of 218% difference (varies per state)
 New York, Illinois & Massachusetts are States with greatest
difference of between 300% to 450%

30. STEP 1
• Select a State that you want to develop and agree to become a Distributor of Shanghai
Tobacco Products.
• Key is familiarity terrain & trade channels within the geography selected.
• Any business entity or entrepreneur who has the 5C’s (Capital, Connection, Channel,
Commercial Enterprise & Character)

31. STEP 2
• Sign & Agree with the Distributor Contract set up by iSales Strategy Inc.
• iSales Strategy Inc. is the global management consulting firm handling the expansion of
Shanghai Tobacco Inc.
• Establish a Business Pipeline, Distribution Sales Plan, Market Penetration Marketing Plan
& Trade Marketing Development initiative with iSales Strategy Inc. for the chosen State

32. STEP 3
• Prepare the Initial Stock Purchase Plan for the Distributor Program
• Minimum of 1 Container Purchase (500 Cases of Shanghai Tobacco Products)
• Initial Inventory Capital Outlay for 500 cases = $320,000
• Shipment Timeline is 2 weeks
• Terms are Cash via Wire Transfer to iSales Strategy Inc. Bank Account
• All U.S Taxation Requirements, Import Duties & State Registration shall be the
responsibility of the distributor assigned
• Marketing Budget for State Trade Efforts shall be parallel with the stocks purchased &
Managed by iSales Strategy Inc.

33. STEP 4
• iSales Strategy Inc. shall be active in the distributor engagement process with stock replenishment
always coursed through the company.
• Stock Replenishment will be a minimum of 1 Container. Payment Terms: CASH before delivery
• iSales Strategy Inc. will be responsible for the market development initiative of Shanghai Tobacco and
is tasked to manage the Marketing Strategy of the latter
• Distributors will have the free hand and authority to sell the products as they see fit. iSales Strategy
Inc. will function as a strategic guide and important advisor to the operation
• iSales Strategy Inc. will disburse and control the marketing fund for the U.S market. Deployment of
which shall be in line with distributor business size

34. STEP 5
• Distributor is expected to achieve targeted numeric and weighted distribution in the U.S
Market
• Distributor assigned to the State shall have a fixed term of 2 years which is renewable
depending on the agreement between iSales Strategy Inc. & the Distributor Company. This
contract though can be prematurely terminated if the conditions or terms of reference are
not met or upon agreement between the 2 parties.
• Only 1 Distributor can be assigned per State. A distributor though can own 2 or more
States as long as the stock purchase is made in line with the minimum requirement.

39.  To support 0.5% of the Tobacco Market in the U.S, a total of $38.4 Million
worth of Stock Inventory is needed at the minimum
 To Start the business, $16 Million is needed to cover all the States in the U.S
market

40.  Tobacco is a Highly Lucrative &
Profitable Category
 High Product Profit Margins & Low
Cost of Business Operations
 Long Term & Sustainable Business
Model
 Overall Product Advantage versus
established Industry Market
Players (Price & Quality)
 Opportunity to venture into other
products & services

41.  Set up a Distribution Agreement with iSales Strategy Inc. (www.isalesstrategy.com)
 This business is only for a chosen few
 Provide the Initial Capital Requirement & other business essentials
 Operate & Grow the Tobacco Distribution Business